Disney intends to freeze hiring and eliminate some positions
Walt Disney Co plans to stop hiring and lay off certain employees as it works to bring the Disney+ streaming service into profitability amid economic uncertainty.
According to a letter seen by Reuters on Friday, Walt Disney Co plans to stop hiring and lay off certain employees as it works to bring the Disney+ streaming service into profitability amid economic uncertainty.
The message was addressed to Disney's division heads by CEO Bob Chapek, who stated that the firm is adopting a targeted hiring block and anticipates "some small personnel reductions" as it works to manage costs.
"While certain macroeconomic elements are beyond our control," continued the message, "achieving these targets needs everyone of us to continue doing our part to manage the areas we can control, most notably our expenses."
The move comes as Disney failed Wall Street estimates for quarterly results on Tuesday, as the entertainment behemoth incurred further losses from its push into streaming video, dubbed its direct-to-consumer (DTC) division. Following the release of the results, the company's stock dropped more than 13% on Wednesday.
Wall Street analysts have expressed concern about Disney's rising streaming costs, with MoffettNathanson analyst Michael Nathanson writing earlier this week that "the company has to prove that their pivot to DTC will be worth the investment price that is currently being paid."
To prepare for an economic crisis, corporate America is laying off thousands of workers. Meta Platforms said earlier this week that it would lose around 11,000 employees, or 13% of its staff, in order to save costs.
Chapek stated that the company has formed a task force that includes Chief Financial Officer Christine McCarthy and General Counsel Horacio Gutierrez to assist him in making "critical big picture decisions."
The company has already begun to examine content and marketing spending, but Chapek insists that any cuts will not compromise quality.
Hiring will be restricted to a small number of important positions, and some personnel cutbacks are expected as the company strives to become more cost-effective, he wrote.
Chapek stated that work travel will be limited and that trips would be performed virtually as much as possible.
"Our transition is intended to ensure that we thrive not only today, but for many years to come," Chapek stated.
(source : Reuters)
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